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kicked off 2014 with a bang, revealing Tuesday afternoon that not only was the first fiscal quarter of the year its best first-quarter subscriber growth in five years, but that its revenue and profit results edged above what everyone was expecting. However, the good news for the company's bottom line is bad news for its stock price: shares of the telecommunications company are down in after-hours trading as investors see the earnings beat, positive full-year outlook and the company's venture into the online streaming space as a selling opportunity.

AT&T reported $32.5 billion in first quarter revenue, a hair above the $32.4 billion analyst consensus and a 3.6% increase over revenue reported for the same time in 2013. First quarter net income came in at $3.7 billion, or 70 cents per share, up from 67 cents per share in the prior-year quarter. Adjusting the results to exclude special items -- like the costs associated with its acquisition of Leap Wireless -- earnings came in at 71 cents per share, beating the Street consensus by a penny and marking an 11% increase over the adjusted 64 cents per share reported for the first quarter of 2013.

The wireless carrier said it added more than 1 million subscribers in the quarter, 625,000 of which were postpaid net adds (or contract subscribers), more than double the 296,000 postpaid subscribers added during the same time in 2013. This growth also marks an improvement over the fourth quarter of 2013, when AT&T reported 566,000 contract subscribers, missing analyst predictions and marking a 27.4% year-over-year decline.

These gains were slightly offset by a net loss of 50,000 prepaid subscribers (which AT&T attributed to declines in session-based tablets) and a net loss of 206,000 reseller subscribers, which AT&T attributed to losses in "low-revenue" 2G accounts. Even with this, the company said this was its best first-quarter postpaid growth in five years.

"We have been working very deliberately to transform our business, and this quarter you really start to see the benefits,” Randall Stephenson, AT&T chairman and CEO, said in a statement Tuesday afternoon. “Customers really like the new mobility value proposition and are choosing to move off device subsidies to simpler pricing while at the same time, they are continuing to move to smartphones with larger data plans."

Other highlights from the quarter include the company's wireless revenue, which increased 7% to $17.9 billion, as well as the company's smartphone base, which increased 1.1 million during the quarter and now accounts for 92% of postpaid phone sales.

As a result of the quarter's strong results, AT&T is raising its outlook for the rest of 2014, predicting consolidated revenue growth of "4% or greater," adjusted earnings per share growth in the mid single digit range and free cash flow in the $11 billion range.

Earlier on Tuesday AT&T revealed that it is making a play for a chunk of the online video streaming market: together with The Chernin Group, a privately-held independent media holding company, it is committing $500 million to fund a venture that will acquire, invest in and launch video streaming services (also known as "over-the-top," or OTT video services). AT&T and Chernin said the goal of this new joint venture will be to invest in advertising and subscription video-on-demand channels and online streaming services.

“AT&T and The Chernin Group are combining our skill sets to address the growing consumer demand for accessing content how and when they want it,” John Stankey, AT&T's Chief Strategy Officer, said in a statement on Tuesday.

“Consumers are increasingly viewing video content on their phones, tablets, computers, game consoles and connected TVs on mobile and broadband networks," said Peter Chernin, Chernin Group CEO. This is not Chernin's first attempt to get into the online streaming space: in 2013, the former president made an unsuccessful attempt to acquire Hulu. In AT&T, however, he has found something with an even greater reach. AT&T boasts 110 million wireless subscribers compared to the 5 million people subscribed to Hulu as of year-end 2013. "AT&T’s massive reach on those platforms across mobile and broadband and their commitment to the online video space make them the perfect fit for this venture with us,” Chernin said.

AT&T's move into the online streaming space follows a similar effort launched by competitor Verizon earlier in the year; in January, Verizon announced that it would purchase the assets of Intel Media, ’s business division dedicated to the development of cloud TV products and services. At the time, Verizon CEO Lowell McAdam called the move an opportunity to "enhance, expand, accelerate and integrate" Verizon's delivery of video products and services on a wide array of devices.

Shares of AT&T, which traded in the green following the video streaming announcement and closed at $36.26 for an 0.55% gain, dipped in after-hours trading as investors saw the good earnings news and positive forward momentum as a selling opportunity. The stock is currently down 2.04%; year-to-date, AT&T has posted a 3.2% return.